>>> US Early premarket gappers

Early premarket gappers

Gapping up:

  • LX +9.3%, WSM +7%, SNPS +5.1%, ICLK +4%, WMIH +3.8%, DXCM +2.3%, JWN +2.2%, HTHT +2.2%, BTE +2%, ACAD +1.8%, NVS +0.9%, DDS +0.8%, HMLP +0.5%

Gapping down:

  • QADA -9.3%, LB -6%, BRY -4.3%, SBGL -4.3%, HRL -4.3%, SMRT -3%, ZAYO -1.3%, MEDP -1%, DRI -0.7%

WSJ : H&M May Never Catch Up

H&M May Never Catch Up
The world’s second largest clothing retailer hasn’t done enough to stop its business fraying


H&M HMB +0.79% needs a more radical restyling.

The world’s second-largest fashion chain by sales has fallen behind as consumers have moved online. Despite a big decline, the stock hasn’t priced in the new reality.

For years, Hennes & Mauritz delivered metronomic profit growth by rolling out new stores, most of them under the namesake H&M banner. Consumers loved its combination of low prices, high fashion and convenient locations.

About three years ago, however, the formula stopped working. The Swedish company was slow to react as consumers—and other retailers—moved on.

One change was the rise of online fashion via companies like Amazon’s Zappos in the U.S. and Zalando and ASOS in Europe. Another was the expansion of offline discounters like Primark, a European chain that now has nine U.S. stores, the most recent of which opened in Brooklyn, New York, last month. Zara-owner Inditex, the world’s top clothing retailer, used a more flexible and rapid sourcing model to meet fashionistas’ desires for novelty in a way that H&M’s design setup—with most clothes ordered a season in advance—couldn’t. Compared with more innovative peers, H&M no longer seems so chic, or convenient.

The company is now addressing these deficiencies, but too late and too timidly. The scale of the transformation required is daunting. It will take time and money, with no guarantee of success.

H&M’s stock has fallen more than 60% in the past three years as profits have plunged and the scale of the company’s problems has become clear. But it could fall still further. A valuation of more than 15 times 2018 earnings offers little compensation for the costs and risks of a turnaround operation. Analysts are currently penciling in modest growth in profits next year, but the consensus forecast is predicated on an improvement in sales.

There was little evidence of the long-awaited improvement in the latest results. The company doesn’t report like-for-like sales growth, but UBS calculates that this crucial figure was minus 4% for the quarter through May, only marginally better than the recent trend. And inventories as a share of sales hit a new high in June, implying that H&M’s summer offerings didn’t resonate with consumers. The company will be aggressively clearing clothes in the current quarter, hitting margins.

>>> ACS seeks advisers to sell EUR 500m in shadow toll roads held by Iridium - r

ACS seeks advisers to sell EUR 500m in shadow toll roads held by Iridium

Actividades de Construccion y Servicios (ACS) [BME:ACS], the Spain-based construction services company, has put up for sale its shadow toll motorways, which it operates in Spain through its subsidiary Iridium, El Economista reported, citing sources close to the process.
ACS is seeking advisers for this transaction, valued at more than EUR 500m, with the intention of launching the process in autumn, the Spanish-language paper said, citing several financial sources. ACS is considering whether to open Iridium’s capital to an investor or sell the entire business, according to the report.
Iridium manages a total of nine shadow toll motorways in Spain. Under this model, the company builds and finances the road and the administration pays an annual fee based on traffic and availability.

The nine motorways amount to more than 360 kilometres of dual carriageway, with a combined investment volume of more than EUR 1.53bn according to the company data. Seven of them are owned by the state and two by the Government of Catalonia. All have long term concession contracts, with the initial maturity date in 2026, the paper said.

>>> Agfa-Gevaert to sell or list Healthcare IT next year

Agfa-Gevaert to sell or list Healthcare IT next year - report (translated)
23 AUG 2018
Agfa-Gevaert [EBR:AGFB], a Belgium-based digital imaging systems developer, will announce only next year whether it will sell or float its division, Healthcare IT. The announcement will be made in March at the presentation of the 2H18 results, De Tijd reported, citing the company.

As this news service reported earlier Agfa-Gevaert last year said it is working towards a split of Healthcare IT followed by a sale or listing on the stock exchange.

Healthcare IT could be worth EUR 800m, the report continued, citing an estimate of KBC Securities.

The report mentioned General Electric, Siemens, Philips, Cerner, Meditech and CompuGroup Medical as potential buyers, according to KBC Securities.

Link to original report here.

>>> What to look at today - 23rd of August 2018

 The dollar rallied for the first day in six as investors awaited a meeting of global central bankers after the Federal Reserve signaled no change to its pace of monetary policy tightening. Asian stocks traded mixed.
US after hours SNPS +7%, WSM +6%, HTHT +5%, ZAYO +2% higher and LB -5% lower following earnings/guidance

Nikkei +0.25% Hang Seng -0.38% CSI +0.50% Shanghai +0.53% Shenzen +0.68%

Eur$ 1.1565 CNH 6.8676 CNY 6.8687 JPY 110.85 GBP 1.2881 CHF 0.9843 TRY 6.0646 RUB 68.2107 WTI$ 67.86 unch.

S&P Unch EuroStoxx -0.06% FTSE -0.23% Dax -0.12% SMI +0.03%

Macro :
- Swedish Social Democrats Want to Raises Taxes by ~SEK5b: TT
- Goldman Is Said to Be Shutting Two Hedge Funds Run Out of Asia
- Trump Auto Tariff Threats Are Said to Hinder Push for Nafta Deal


Keep an eye on :
- ACS SM : ACS Said to Put Iridium Managed Assets up for Sale: Economista
- ARAMCO IPO : Saudi Arabia Remains Committed to Saudi Aramco IPO
- ATL IM : Atlantia May be Cut by Moody’s After Bridge Collapse
- BABA US : Alibaba’s Jack Ma: 90% of Retail Sales to Come From Internet
- BCVN SW : BC Vaudoise First Half Revenue 1.2% Below Estimates
- BANMB NA : BAM First Half Adjusted Pretax Profit EU57.8 Mln
- BHG SS : Bygghemma First Holding Says Prosecution Started on VAT Case
- CYAD BB : Celyad First Half Cash And Cash Equivalents EU63.2 Mln
- COPN SW : Cosmo, Bausch Sue Teva for Damages on Another Uceris Patent
- CSGN SW : Credit Suisse Freezes $5b in Russia-Linked Funds: Reuters
- DBK GY : Deutsche Bank `Unattractive,' Berenberg Slashes Price Target
- DBK GY : Deutsche Bank CEO Reassures U.K. Staff in London Visit: FT
- FCA IM : Fiat Chrysler Mulls Unit Sale; Car Parts Drop: Industrials Wrap
- HLNG NO : Hoegh LNG Second Quarter Ebitda 2.0% Above Estimates
- IBAB BB : Ion Beam First Half Revenue EU114.7m Vs EU151.6m Y/Y
- KIN BB : Kinepolis First Half Adjusted Net EU18.7 Mln Vs. EU16.4 Mln Y/Y
- KTCG AV : Kapsch TrafficCom First Quarter Ebit EU7.1 Mln
- LEAS BB : Leasinvest First Half EPRA EPS EU2.83 Vs. EU2.69 Y/Y
- LHN SW : Holcim Indonesia Sees Sales Volume Rising 6% Y/y in 2018
- LLBN SW : Liechtensteinische LB First Half Net Income CHF45.8 Mln
- MULTI NO : Multiconsult Second Quarter Ebit NOK48.9 Mln
- NOVN SW : Novartis Phase III SOLAR-1 BYL719 Study Meets Primary Endpoint
- PRS NO : Prosafe Second Quarter Revenue Beats Highest Estimate
- RYA LN : Ryanair’s Dutch Cabin Crew Votes To Strike
- SALM NO : Salmar Second Quarter Operating Ebit 2.7% Below Estimates
- SAN FP : Sanofi Wins Ruling Blocking Cadila’s Copy of Mozobil Cancer Drug
- SEM AV : Semperit First Half Loss EU67.4 Mln
- SIE GY : Siemens Files Appeal at Russian Supreme Court in Crimea Case: HB
- SON PL : Sonae Says It Continues to Study Possible IPO of Retail Unit
- VIE FP : Suez Share Bounce Unwarranted With Key Concerns Intact: RBC
- VTA NA : Volta Finance to Add Sterling Market Quote on LSE
- VOLVB SS : Some Volvo Owners Said to Push for VCE Spinoff, DI Reports

>>> Europe : Brokers Upgrades & Downgrades - 23rd of August 2018

>>> Up
* BNP Paribas Upgraded to Buy at Bankhaus Lampe; PT 60 Euros
* Masmovil Upgraded to Overweight at Barclays; PT 150 Euros
* Sunrise Upgraded to Overweight at Barclays; PT 100 Francs
* TalkTalk Upgraded to Overweight at Barclays; PT 1.50 Pounds
* Zooplus Upgraded to Hold at Kepler Cheuvreux; PT 146 Euros

>>> Down
* Terveystalo Cut to Underweight at Morgan Stanley; PT 8.77 Euros

>>> Initiation
* Tenaris Rated New Buy at Jefferies
* Vallourec Rated New Hold at Jefferies

>>> Call

>>> US After Hours Summary: SNPS +7%, WSM +6%, HTHT +5%, ZAYO +2% high


After Hours Summary: SNPS +7%, WSM +6%, HTHT +5%, ZAYO +2% higher and LB -5% lower following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SNPS +6.7%, WSM +6.2%, HTHT +4.6%, ZAYO +2.3%

Companies trading higher in after hours in reaction to news: WMIH +3.8% (ticking higher; initiated with Outperform at Wedbush), JWN +2.4% (authorizes repurchase program of up to $1.5 bln of outstanding common stock; affirms quarterly dividend of $0.37/share), DDS +0.8% (light volume; Director Stephens disclosed the purchase of 10K shares worth ~$760K), SBUX +0.2% (Group Pres / COO Brewer disclosed the purchase of 5K shares)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SMRT -9.5%, QADA -7% (also launched new Indonesian subsidiary PT QAD Asia Indonesia and agreed to acquire the business assets of PT Iris Sistem Inforindo; scheduled to close by Aug 31), LB -5%

Companies trading lower in after hours in reaction to news: MEDP -1% (announces secondary offering of 5,224,997 shares of common stock by selling shareholders), DRI -0.7% (ticking lower; was notified by federal authorities that Cheddar's Scratch Kitchen restaurants point-of-sale systems may have been compromised in cyberattack incident involving restaurants in 23 states)